Downpayment refund

Dear Atty. Angela,

My husband and I purchased a condominium unit in 2021 where the developer in its undertaking stated that the turnover will be in 2022 or early 2023. We have already paid the P5 million downpayment but there was still no turnover. It was only in April 2024 that they scheduled the turnover and to our great shock and alarm, we discovered multiple serious defects which made us refuse to accept the unit. There has already been a two-year delay and the core issues on the outcome of the unit are just unacceptable. We want to file a case to cancel the sale and refund our downpayment. Do we have the right to do so?

Celine Isabel

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Dear Celine Isabel,

From the facts, there is legal basis to file a case with the Housing and Settlements Adjudication Commission under the Department of Human Settlements and Urban Development.

Under Section 20 Presidential Decree (PD) 957, otherwise known as Subdivision and Condominium Buyers’ Protection Decree, developers are required to deliver all facilities, improvements, infrastructures and other forms of development as stated in the plans and within the approved Time of Completion.

In case the developer of a subdivision or condominium fails in its obligation under Section 20 of PD 857, Section 23 of the same law gives the buyer the option to demand reimbursement of the total amount paid, or to wait for further development of the subdivision, and when the buyer opts for the latter alternative, he may suspend payment of installments until such time that the owner or developer had fulfilled its obligation to him. As such, no installment payment shall be forfeited in favor of the developer when there is showing that it reneged on its obligation to develop a condominium project according to the approved plan and within a specified time limit.

In the case of Megaworld Globus Asia Inc. v. Tanseco, G.R. 181206 (2009), the Supreme Court was instructive that time was of the essence because the buyer relied on Megaworld’s promise of timely delivery when she agreed to part with her money; that the delay should be reckoned from 31 October 1998, there being no force majeure to warrant the application of the 30 April 1999 alternative date; and that specific performance could not be ordered in lieu of rescission as the right to choose the remedy belongs to the aggrieved party.

Based on the foregoing, as buyers, you can demand a full refund of all payments made, including amortization interests. It is for the above reasons that the Supreme Court underscores the principle that condominium buyers, are protected by PD 957. The law provides a protective mantle over helpless citizens who may fall prey to unscrupulous condominium sellers.

Atty. Angela Antonio